Question
In: Accounting
The GONZO partnership is owned by five equal partners: Gary, Ophelia, Nancy, Zoe, and Olivier. The...
The GONZO partnership is owned by five equal partners: Gary, Ophelia, Nancy, Zoe, and Olivier. The partners are considering entering into a buy-sell agreement to establish an orderly transfer of the ownership interest in the event that one of the partners were to die, become disabled, or retire. Which of the following statement is (are) true regarding their options for the buy-sell agreement? 1.If they establish a cross-purchase agreement and fund it with life insurance, 20 policies will be needed. 2. If they establish an entity purchase agreement and fund it with life insurance, five policies will be needed. 3. If they establish either a cross-purchase or entity agreement and fund it with life insurance, the premiums paid on the policies will be tax deductible as a business expense. 1 and 2 2 and 3 1 and 3 1 only.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Bryan and Gayle are equal partners in BG Partnership. The partnership reports the following items of...
Bryan and Gayle are equal partners in BG Partnership. The
partnership reports the following items of income and expense:
Ordinary income from operations
$13,000
Interest income
5,000
Long-term capital gains
23,000
§ 179 expense
55,000
Charitable contributions
3,000
page 14-41 Which of these items are considered separately stated
items? On what form will these items be reported to the
partners?
Where will these amounts be reported by the partners?
A and B are equal partners in a personal services partnership. Each partner acquired her partnership...
A and B are equal partners in a personal services partnership.
Each partner acquired her partnership interest for cash several
years ago. None of the partnership’s asset sis Section 704(c)
property. The partnership has the following balances sheet:
Assets
Liabilities and Partnerships' Capital
A.B.
FMV
cash
13,000
13,000
Liabilities
2,000
capital
assets
Capital
A.B.
FMV
collectibles
1,000
3,000
A
10,000
15,000
Other
6,000
2,000
B
10,000
15,000
Subtotal
...
A and B are equal partners in a personal services partnership. Each partner acquired her partnership...
A and B are equal partners in a personal services partnership.
Each partner acquired her partnership interest for cash several
years ago. None of the partnership’s assets is Section 704(c)
property. The partnership has the following balance sheet:
Assets
Liabilities and Partners’ Capital
A.B.
F.M.V.
A.B.*
F.M.V.
Cash
$13,000
$12,000
Liabilities:
$2,000
Capital
Assets:
Capital:
Collectibles
1,000
3,000
A
$10,000
15,000
Other
6,000
2,000
B
10,000
15,000
Subtotal
7,000
5,000
Receivables
0
14,000 ...
Jim, one of two equal partners of the JJ Partnership, a general partnership, contributed business property...
Jim, one of two equal partners of the JJ Partnership, a general
partnership, contributed business property with an adjusted basis
to him of $15,000 and a fair market value of $10,000 to the JJ
Partnership. Jim’s capital account was credited with $10,000. The
property later was sold for $12,000. As a result of this sale, how
much gain or loss must Jim report on his personal income tax
return? a. $1,000 gain b. $1,500 loss c. $2,000 gain d. $3,000...
33. The ABCD partnership has four partners. Each partner’s adjusted basis in the partnership interest owned...
33. The ABCD partnership has four partners. Each
partner’s adjusted basis in the partnership interest owned by that
partner was $40,000 on the first day of last year. The partnership
reported net income for last year of $80,000 (there were no
separately stated items to take into account). The partnership
distributed pro rata to each partner $55,000 in cash plus identical
parcels of land that each had a fair market value of $25,000 and a
basis to the partnership of...
Lisa and Page are equal partners in the Law Lady Partnership, and they are calendar year...
Lisa and Page are equal partners in the Law Lady Partnership,
and they are calendar year taxpayers. The partnership incurred the
following items during the year:
Sales
$600,000
Cost of Goods Sold
$190,000
Dividends on Corporate Investments
$19,000
Tax-Exempt Interest Income
$5,000
Section 1245 Gain (Recapture) on Equipment Sale
$36,000
Section 1231 Gain on Equipment Sale
$32,000
Long-Term Capital Gain on Stock Sale
$13,000
Long-term Capital Loss on Stock Sale
$6,000
Short-Term Capital Loss on Stock Sale
$14,000
Depreciation (No...
Andrew and Beth are equal partners in the AB Partnership. On December 30 of the current...
Andrew and Beth are equal partners in the AB Partnership. On
December 30 of the current year, the AB Partnership agrees to
liquidate Andrew’s partnership interest for a cash payment on
December 30 of each of the next five years. What tax issues should
Andrew and Beth consider with respect to the liquidation of
Andrew’s partnership interest?
C and D are equal partners in the CD partnership. C starts the year with an...
C and D are equal partners in the CD partnership. C starts the
year with an adjusted basis of $300 in his partnership interest
while D starts the year with an adjusted basis of $600. The
partnership distributes cash of $200 and inventory, adjusted basis
$450 fair market value $500, to C and cash of $200 and land,
adjusted basis $300, fair market value $700, subject to a liability
of $200, to D. The partnership continues operation thereafter. What
consequences...
4. C and D are equal partners in the CD partnership. C starts the year with...
4. C and D are equal partners in the CD partnership. C starts
the year with an adjusted basis of $400 in the partnership while D
starts the year with an adjusted basis of $700.
(a) The partnership distributes cash of$ 500 to C and land,
adjusted basis $300 fair market value $500 to D. The partnership
thereafter continues operations. What consequences?
(b) Same as (a) except that the land had an adjusted basis of
$800 (fair market value still...
5. C and D are equal partners in the CD partnership. C starts the year with...
5. C and D are equal partners in the CD partnership. C starts
the year with an adjusted basis of $300 in his partnership interest
while D starts the year with an adjusted basis of $600. The
partnership distributes cash of $200 and inventory, adjusted basis
$450 fair market value $500, to C and cash of $200 and land,
adjusted basis $300, fair market value $700, subject to a liability
of $200, to D. The partnership continues operation thereafter. What...
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